Patrick Ezell believes in doing right by his workers, so he has no issue with covering the health insurance premiums for his marketing firm’s 27 employees.

But that monthly premium just keeps getting bigger.

“It’s one of the biggest checks I sign every month,” said Ezell, CEO of Portland digital marketing firm Copious. “We’ve seen it continue to rise.”

Portland employers, whether it be a food cart, a garage or a manufacturer, have at least one thing in common — they’re grappling with the rising cost of health insurance.

With much of the Affordable Care Act set to take effect on Jan. 1, business owners are weighing their options: Should we offer a health insurance plan? To all or just the full timers? Can we afford it? How much should we cover? Can we keep our current plan? Or should we just get out of the game and send employees to the Cover Oregon exchange?

“There’s a lot of uncertainty out there,” said Stuart Byron, a consultant with Affordable Care Strategies in Portland. “A lot are feeling like it’s going to be so complicated and produce so much red tape that the cost of doing it is going to increase.”

The amount of decisions and paperwork can indeed seem daunting, especially since the nuances of every business are a little different and there isn’t a one-size-fits-all answer. Who has time to figure out “full time equivalents” and “look back periods” when you have a business to run?

Tim Rasch, an insurance broker with Larry Sherwood & Associates in Portland, explained the conundrum: “It’s not a matter of we don’t want to do this, but ‘How do we make this happen?’”

Whether they currently offer insurance or not, it’s something on everyone’s minds because everyone must have insurance starting in January or pay a penalty. Cover Oregon, the new health insurance online marketplace, opens Oct. 1, and individuals and small businesses will be able to shop for plans and access subsidies, if they qualify.

A year later, on Jan. 1, 2015, “large” businesses — those with at least 50 full time workers — must offer employees who work an average of at least 30 hours a week an affordable health plan or pay a penalty of $2,000 per employee (excluding the first 30).

Some already covered

Thousands of Oregon businesses that are under the 50-worker threshold already offer health plans ­— even though they don’t have to under the law — or are considering doing so. According to the state Insurance Division, 37 percent of Oregon businesses with fewer than 50 employees offer health plans. The percentage is much higher for Oregon businesses with more than 50 — 96 percent offered plans last year.

Copious is one of those companies that have voluntarily provided health coverage. To him, it’s all about attracting and retaining talent and doing right by workers.

“They need to make sure they can provide for themselves and their family, like what they would get at a larger company,” said Ezell, whose company covers 100 percent of insurance premiums for single employees and 50 percent for dependents. “The majority of our overall costs as a business is people, start to finish.”

But many owners are also worried about their ability to maintain this precious benefit, especially after being hit with rate increases year after year.

Average monthly premiums for single individuals in Oregon group plans rose 88 percent in the past decade, from $242 in 2002 to $455 last year, according to the Insurance Division. Rates for families in group plans rose 90 percent, from $678 to $1,291. That translates to thousands of dollars of extra expenses a month that can’t always be passed along to customers.

That’s exactly what’s happened at Cal-Cert. After a series of 30 percent premium increases, the Milwaukie-based calibration service provider could no longer cover 100 percent of its employees’ health benefits.

The company reduced its premium contribution to 85 percent. The benefits package also declined. Copays rose from $10 a few years ago to $25 today.

“It’s getting to the point of can we continue to pay at this rate?” said owner Marshall Doyle. “Everything’s going up except the price to our customers.”

Will it keep rising?

The Kaiser Family Foundation’s annual survey found group premiums rose a relatively modest 4 percent this year from last across the U.S. As for next year, no one can say if they’re rising, falling or holding steady because the plans themselves are changing. That’s because the Affordable Care Act brought new requirements, such as minimum “essential benefits” and caps on out-of-pocket expenses.

What we do know is that the Insurance Division reduced insurers’ 2014 premium rate requests, which range from $218 to $315 a month for a 40-year-old nonsmoker before the employer contribution. We’ll have to wait until 2015 rates requests are made to know if the ACA is bending the cost curve or not.

Meanwhile, the hope is that Cover Oregon will give small employers more choices and flexibility. While it launches Oct. 1, the public will have to go through an insurance agent for at least the first few weeks as kinks are ironed out.

In all, 57,000 employees are expected to obtain group coverage through the site next year. Businesses with under 25 full-time equivalents with an average wage of less than $50,000 will be able to apply for a 50 percent tax credit, up from 35 percent today.

More choices should put downward pressure on prices. That is, if all goes according to plan and lots of consumers and businesses sign up.

“The goal of the marketplace is to drive down price ultimately through competition,” said Marissa O’Brien, a business marketing specialist with Cover Oregon.

Biwa adds health care to cost of a meal

Customers of Japanese restaurant Biwa are paying more for their meals because of health care.

A notice in fine print on the menu mentions a new 5 percent “health and wellness” surcharge, which adds an extra $1.25 to the average check of $26.

The purpose of the extra charge is simple — to help pay for employee health care premiums and provide a bonus to the lowest-paid workers who don’t get tips.

“Costs went up and we saw the writing on the wall that they would continue to go up,” said Gabe Rosen, who co-owns Portland-based Biwa with his wife, Kina Voehlz. “There’s no way we’re going to stop (offering health care). What you do is raise prices to raise revenue. We decided to do it in a transparent way.”

In order to join the group health plan, workers must put in at least 17.5 hours a week. Rosen has offered a plan for the past two years and he’s committed to continuing.

“We’ve lost employees because someone breaks their ankle or they had major surgery and they had to pay it out of pocket, and so I’ve seen the effect of not having health insurance,” Rosen said. “It’s long been an important goal to insure our staff.”

Rosen’s approach is unusual, especially in an industry where practically no one has health insurance.

Proceeds from the extra charge help cover insurance for 22 employees, with a portion reserved to help the lowest-paid workers, basically cooks and dishwashers earning $12 an hour.

“For us (the surcharge) is going to generate a decent amount of extra funds,” Rosen said.

Biwa pays 100 percent of a high-deductible policy, which works well for the mostly young and healthy staff. Otherwise, almost no one on the staff would have insurance.

But it’s been tough for Rosen to swallow the premium increases. Premiums through Health Net increased 12 percent from last year from $155 per employee per month to $180, or $3,960 total a month. The restaurant brings in $1.5 million in revenue a year, so premiums account for 3 percent.

Rosen plans to look into getting a tax credit through the Cover Oregon health insurance exchange.

So what’s been the reaction from customers? Rosen said a few were “livid,” but the vast majority haven’t balked.

“We get guests who would be predisposed to be into this kind of thing,” he said. “It’s been overwhelmingly positive.”

In Timothy Mason’s nearly 27 years as a bike courier, he’s had health insurance for only brief spells.

The first time was in Seattle, when an employer offered dental insurance. Then, four years ago, after a lot of pestering from his parents, he got health insurance on his own. It cost $250 a month, and he didn’t end up using it much.

He dropped that coverage when he joined his employer’s group plan, which cost only $100 a month. He was laid off four months later, so the insurance went away, too.

Now 48 and self-employed, Mason is going without. He’s one of 600,000 Oregonians with no health insurance, or about 16 percent of the population.

Mason believes his active lifestyle has helped keep him healthy. But he doesn’t bounce back from injuries like he once did. He has a deep cut on his hand from playing competitive bicycle polo. He won’t get it stitched up because of the cost.

He’s never had a prostate or colon exam, two screenings that are recommended around his age.

“My health has been good, but I’m at an age when you can’t rely on being youthful anymore,” he said. “I’m starting to confront aches and pains.”

Other issues have cropped up. Last year, he got a $35-a-month dental plan. But he ended up paying $1,200 cash for four cleanings and diagnostic work, even with the insurance, and still owes another $550.

Mason also signed up for a $15-a-month vision plan when he started having trouble reading the pages on his phone. He got glasses for the first time, which cost $500 with insurance.

“I had put that off for four or five years,” Mason said.

Starting Jan. 1, everyone must have insurance. Under the Affordable Care Act, individuals must have a health policy, either through their job or on their own, or pay a $95 penalty, which rises in subsequent years.

Mason will check out the plans and see if he qualifies for a subsidy. If he can get a third part-time job, he should be able to afford insurance again, but if he can’t afford it, he may pay the penalty.

His primary concerns aren’t health insurance, but covering his rent, which is $875 a month, and utilities. The last time he held three jobs, he was making $38,000, but his income has since dropped.

In addition to his business, Auto Courier, which does pickups, deliveries and process services, he helps at a friend’s leather shop during down times.

Still, he wouldn’t want to do anything else.

“I want to be a messenger until they tear my cold, dead hands off the handlebars,” Mason said.

Small business owner won’t slash benefits despite skyrocketing costs

John Bradshaw pays about $84,000 annually in health care costs for his 21 employees.

He feels trapped.

“We scratch and claw every year and we’ve raised the deductible,” said Bradshaw, president of Portland Transmission Warehouse, a 75-year-old family owned and operated business that sells parts all over the Northwest.

Bradshaw’s insurance costs have risen 150 percent since the late 1990s, but the company hasn’t increased its payroll deduction.

Portland Transmission pays about $360 monthly for a single employee and $1,050 for families for health plans through PacificSource. Bradshaw picks up the majority of the premium, with employees ponying up $35 a month for individual plans and $95 for family plans.

The company has always paid the majority of employees’ medical, dental, disability and life insurance as part of their compensation package because it values employees “more than the physical inventory,” Bradshaw said. It has raised deductibles, but Bradshaw wants to keep the benefits commitment he’s made for years.

His rates might have gone up even more had the company not been part of a larger pool of 80 small businesses in Portland and statewide that buys insurance together. The pool is administered by Tualatin-based Xenium HR, a professional employee organization, which is like a human resources department for hire.

“If we bring an increase, he’ll shop around on his own and each year, it makes sense (to come back) and he always stays in,” said Anne Donovan, president of Xenium. “Generally speaking, we’ve trended under the market increases.”

Bradshaw said it’s hard to pinpoint the reason for rising costs, but doctors, insurance companies and lack of wellness are a few of the sources.

The last item seems to frustrate Bradshaw the most.

“You can’t refuse people employment if they smoke. You can’t require them to quit smoking,” he said. “If they would stop smoking, I’d pay the initiation for a health club. I haven’t had a single taker.”

He’s planning to keep an eye on the soon-to-debut online insurance marketplace, Cover Oregon. But he’s not cutting the existing insurance benefits any time soon.